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About the Used Car Loan EMI Calculator
Used car loans carry higher rates than new car finance — commonly 12% to 16% — because the collateral is older and harder to value. Lenders fund a percentage of the valuation they arrive at, not the price you negotiated, and they cap the tenure so the loan ends well before the vehicle reaches the end of its usable life.
The formula
Every bank and NBFC in India uses this reducing-balance formula. Interest is charged only on the outstanding balance, so the interest share of each EMI falls as the loan runs down while the principal share rises.
Things worth knowing
Frequently asked questions
The security depreciates faster and is harder to resell, so lenders price in more risk. Expect 3–5 percentage points above a comparable new car loan.
Typically five years, and constrained by the vehicle's age — most lenders require the car to be under 8–10 years old when the loan matures.
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